The first three years in the crypto space were the darkest times in my life. With a capital of 1 million, I lost over 700,000! At that time, my whole family was on the brink of collapse due to me, almost facing a breakdown. For nearly two months, I locked myself in the house and did not step outside. My wife was constantly arguing with me, and the word 'divorce' felt like a curse, echoing in my ears every day.
But I always had a thought supporting me: I can definitely make it back! It was this unyielding spirit that kept me from completely collapsing.
By the fourth year, I held on to the remaining 300,000, determined to turn my fortunes around. I simply quit my job and focused entirely on trading cryptocurrencies. I even made a vow to my wife that if I couldn't make it back, there would be consequences... Looking back now, I really put all my bets on the table.
From that point on, I fully immersed myself. I began to review each trade, summarizing the mistakes I made before, listing out the points of error in my operations one by one, and reflecting repeatedly. I would watch the operations of crypto big shots, studying their thought processes and techniques, observing how they analyzed the market, and how they seized entry and exit moments.
Gradually, the situation began to improve, and I found a way, no longer blindly rushing in and out as before, but instead planning my account well, combining short and medium-term strategies. It turned out that this was the best way to achieve compound interest.
Thus, relying on the remaining 300,000, I gradually achieved over 60 million now. From losses to stable profits, this journey has not been easy, and only I know the hardships involved. But fortunately, I did not give up and finally saw the light.
Some famous technical indicators have persisted for a reason. For instance, the divergence signals of MACD, the overbought and oversold signals of KD, support and resistance signals, etc. While they cannot guarantee profits, they allow you to perform quantitative analysis on a more mature model, providing investors with a basic direction.
1. Keep a close eye on Bitcoin's movements
In the crypto space, Bitcoin often leads the rise and fall direction; while Ethereum can sometimes be strong and have independent trends, most altcoins are influenced by it.
2. Pay attention to the relationship between Bitcoin and USDT
Bitcoin and USDT often move inversely; when USDT rises, be cautious of Bitcoin dropping, and when Bitcoin rises, it is an opportunity to buy USDT.
3. Seize trading opportunities in the early morning
From midnight to 1 AM, pinning phenomena are common. Domestic traders can set low buy prices for their desired coins before sleeping, high sell prices, or have surprise transactions for easy profits.
4. Observe the morning's rise and fall trends
Every morning from 6 to 8 AM is a critical time for judging whether to buy or sell. If there is a continuous decline from midnight to 6 AM, and it still declines at this time, it's advisable to buy or add to positions, with a high probability of a rise that day; if it continues to rise, it's advisable to sell, with a high likelihood of a drop that day.
5. Pay attention to fluctuations in the afternoon
Pay special attention at 5 PM, due to time differences, US traders start operating, which may trigger fluctuations in coin prices. Many significant rises and falls occur at this time.
6. Be cautious of 'Black Friday'
There is a saying in the crypto space about 'Black Friday'; although there can be significant drops on Fridays, there can also be big rises or sideways movements, just pay attention to the news.
7. Be patient with declining coins
If a coin with a certain trading volume drops, do not worry; patience in holding can lead to a recovery. It may take 3 to 4 days at the shortest, or a month at the longest. If you have surplus funds, you can average down in batches to accelerate the recovery, unless it's a garbage coin.
8. Persist in long-term spot trading
Engage in spot trading, hold the same coin long-term while trading less; profits often exceed those from frequent trading, it just depends on your patience.
9. Pay attention to external influencing factors
The volatility in the crypto market is influenced by multiple factors, such as the attitudes of various countries toward cryptocurrencies, negative sentiments leading to declines; US financial policies, such as rumors of a wealth tax; and the views of influential figures on cryptocurrencies, such as Elon Musk's statements. Keep an eye on financial news.
Let me share some simple rules about trading cryptocurrencies; there are only 10 iron rules. Mastering these 10 rules will enable you to stand firm in the crypto space and then look for development. The content is short, but every sentence is useful, solid information, so save and collect it quickly.
Knowledge about trading cryptocurrencies:
Let me share my experiences
Look at technical patterns; first, check the monthly and weekly charts. If obviously in a downtrend, do not rush to buy. If the weekly and monthly charts are in a sideways range, observe carefully. If the bottom continues to rise, buying time is close. If in an upward trend, find the opportunity to buy during daily pullbacks.
Second, observe daily candlestick patterns; do not buy in a downtrend. When the bottom continues to rise, choose to buy at oscillation lows, which may require patience and can be quite frustrating. If the daily chart breaks upward, find the breakout retest or buy when the daily line pulls back to ema10 or 20; this is the right-side buying point.
Third, look at the short cycles of 4 hours and 1 hour; a pullback to ema10 or 20 is a buying point.
Weekly, daily, 4-hour, 1-hour charts, from large cycles to medium cycles to small cycles. Main chart selects ema5-10-20-60.
How many minutes of candlestick charts to look at for short-term trading in the crypto space
The best candlestick chart observation time for short-term trading in the crypto space depends on trading strategies: Quick decisions: 5-minute candlestick chart to capture short-term trend changes. Mid-term trends and support/resistance levels: 15-minute candlestick chart for a broader perspective. Long-term short-term opportunities: 30-minute candlestick chart filters out short-term noise, showing clear trends.
Best candlestick chart observation time for short-term operations in the crypto space
When conducting short-term trading in the crypto space, choosing the appropriate candlestick chart observation time is crucial. Based on experience, the best observation times are as follows:
1. 5-minute candlestick chart
The 5-minute candlestick chart can capture changes in short-term market trends, making it very suitable for short-term traders making quick decisions. By observing the 5-minute candlestick chart, you can quickly identify price fluctuations, trend reversals, and changes in trading volume.
2. 15-minute candlestick chart
The 15-minute candlestick chart provides a broader market perspective, helping identify mid-term trends and support resistance levels. For traders looking to capture more stable short-term trading opportunities, the 15-minute candlestick chart is a good choice.
3. 30-minute candlestick chart
The 30-minute candlestick chart can filter out short-term noise and present a clearer market trend. It is suitable for traders seeking longer-term short-term trading opportunities, helping them identify potential breakouts and pullbacks.
Techniques for observing candlestick charts
When observing candlestick charts, pay attention to the following techniques
Trendline: Connect high or low points to identify trend reversals and continuations.
Support and resistance levels: Determine the price levels frequently encountered during volatility, which can serve as references for trading opportunities.
Trading Volume: Trading volume is the driving force behind price changes; observing volume can confirm trend strength.
Candlestick patterns: Different candlestick patterns can provide clues about market sentiment and trends.
In this brutal market that follows the '80/20 rule', to become one of the few who continue to profit, one needs to systematically build a cognitive framework, optimize strategies, and strengthen execution.
1. Understand the essence of the market: the underlying logic of zero-sum games
The essence of the crypto space is a zero-sum game of capital redistribution. The market itself does not generate value; your profits must come from others' losses. This characteristic determines:
Probability dominates results: Professional investors enhance their single trade win rate to over 50% through technical analysis, on-chain data, etc., and achieve long-term positive returns through capital management. For example, using the RSI indicator to determine overbought and oversold zones, combined with volume to validate trend strength.
Cycle determines strategy: Bitcoin's four-year halving cycle, Ethereum upgrades, etc., lead to alternating bull and bear markets. A dollar-cost average of Bitcoin at 3800 during the 2018 bear market could yield a 12-fold return by the 2021 bull market. Current focus should be on the changes in computing power and institutional holdings data after the 2024 halving.
Emotions amplify volatility: FOMO (fear of missing out) and panic emotions lead to sharp price fluctuations. For instance, during the 2021 crash on May 19, ETH halved from $3400, resulting from retail investors following the trend to sell.
2. Build a Profit System: A Closed Loop from Cognition to Execution
1. Cognitive Upgrade: Break through information silos
Learn underlying technology: Master blockchain consensus mechanisms (like PoW/PoS), principles of smart contracts, understand Bitcoin's scarcity (21 million units) and Ethereum's ecological scalability. Recommended reading includes (Mastering Bitcoin) and (Digital Gold) among other classics.
Analyze market structure: Participants in the crypto space include miners (providing computing power), project teams (issuing tokens), exchanges (providing liquidity), institutional investors (dominating capital flows), and retail investors (emotion-driven). Institutions often use a four-stage operation strategy: 'accumulation - wash trading - pump - dump', for example, during the 2023 rotation in the AI sector, tokens like FET and AGIX exhibited a five-wave upward structure.
Mastering Analytical Tools:
Technical Analysis: Determine reversal signals through candlestick patterns (such as hammer and doji), identify volatility using Bollinger Bands, and assess trend direction with MA50/MA200 moving averages.
On-chain Data: Use Glassnode to monitor net flows to exchanges and changes in whale holdings, and track smart contract interactions through Nansen.
Fundamental Analysis: Evaluate the project team's background, technical implementation progress, and ecosystem partners. For example, Solana's TPS performance and the number of ecosystem projects directly affect token value.
2. Strategy Optimization: Transitioning from gambling to investing
Capital Management: Four Wallet Rule:
Cold Wallet (60%): Store core assets (like BTC, ETH), set multi-signature and hardware wallets to isolate risks.
Warm Wallet (20%): For spot dollar-cost averaging and DeFi mining, providing stable cash flow.
Hot Wallet (10%): Participate in high-risk speculation (like MEME coins, NFTs), with losses not exceeding 5% of capital.
Fiat Wallet (10%): Follow the '4% principle' to cover living expenses, avoiding financial pressure affecting decisions.
Risk Control: Three-layer stop-loss system:
Minor Loss (3%): Immediately close positions if a key support level is breached.
Clear Out (5%): Stop loss when trend reversal signals appear.
Unconditional Exit (8%): If daily losses exceed 8%, force a break to avoid emotional averaging down.
Dynamic Position Balancing: Gradually reduce spot holdings in a bull market, transferring 30% of profits into cold wallets; during bear market dollar-cost averaging, set 'grid trading' to automatically buy equal amounts of assets when prices drop by 10%.
3. Practical Techniques: Identify Market Maker Tactics
Avoid falling into pitfalls:
News manipulation: Be wary of 'internal groups' recommending 'hundred-fold coins'; 90% of low-quality projects will crash quickly after a pump.
Candlestick manipulation: Market makers often create false breakout illusions using 'long upper shadows + volume stagnation', for example, in 2024, a certain DeFi token fell by 70% after breaking its previous high.
Contract pinning: Before quarterly contract expirations, prices often exhibit short-term violent fluctuations (such as ±10%); one should close positions in advance or reduce leverage.
Utilizing market maker patterns:
Volume validation: An increase in price should be accompanied by increased volume; a rise on diminishing volume is often a trap (for instance, in 2023, a certain MEME coin surged 80% in a day but saw shrinking volume, followed by a fall to zero).
Moving average strategy: Enter when the price holds above MA60 and MACD shows a golden cross; reduce positions when it drops below MA20, and clear positions if it falls below MA60 with increased volume.
3. Cultivating Core Competence: Surpassing the Market
1. Independent thinking: Break free from information dependency
Establish a decision-making framework: Each transaction must meet the 'three-fold filtering' conditions:
Trend confirmation: MA50 on the weekly level is trending upwards.
Capital flow: Large on-chain transfers are active, and net outflow from exchanges is increasing.
Sentiment indicator: Discussion heat on social media has not peaked (to avoid FOMO entries).
Verify the authenticity of information: Query project contract codes through block explorers (like Etherscan), analyze on-chain data using Dune Analytics, rather than blindly trusting KOL recommendations.
2. Psychological preparation: Combat human weaknesses
Trading diary method: Record the rationale, emotional state, and results of each trade, and review strategies weekly. For instance, a trader in 2024, after panic selling ETH, reviewed and found that the RSI was already in the oversold zone at that time, later adjusting to 'stop loss if it falls below MA60.'
Stress testing training: Use a simulated account for high-leverage trading to experience liquidation risks and enhance mental resilience.
Emotional isolation mechanism: Set a 'decision cooling-off period'; major operations should wait 24 hours before execution to avoid impulsive orders.
3. Continuous Evolution: Building a Moat
Technical Deepening: Learn Solidity programming or data analysis, participate in DeFi protocol development or on-chain data analysis, transitioning from investor to value creator.
Ecosystem Layout: Prepare for potential sectors in advance, such as Layer 3 scaling solutions in 2025, AI + blockchain applications, to gain excess returns through early participation.
Compliance Awareness: Pay attention to regulatory dynamics in various countries (such as the EU MiCA legislation) and choose compliant exchanges (like XBIT with KYC certification) to avoid policy risks.
4. Ultimate Rule: Use Probabilistic Thinking to Achieve Long-term Compound Interest
Application of the Law of Large Numbers: With a single trade win rate of 55% and a risk-reward ratio of 2:1, conducting 100 trades consecutively can achieve over 30% returns. The key is to control position size (single trade ≤ 5% of capital) to keep single trade losses within a manageable range.
Anti-fragile design: During extreme market volatility (like the 2022 LUNA crash), obtain profits through cross-chain arbitrage or options hedging, turning risks into opportunities.
Time compounding effect: Long-term holding of Bitcoin yields an annualized return rate exceeding 20%, far surpassing short-term speculation. Bitcoin bought at $3800 in 2018 grew over 12 times in value by 2024.
Conclusion
The brutal reality of the crypto space is that short-term profits rely on luck, while long-term profits depend on a system. To break the fate of being 'retail investors', one must find breakthroughs in the following three areas:
Cognitive Breakthrough: Systematically learn blockchain technology, market mechanisms, and investment strategies, establishing independent judgment capabilities.
Strategy Breakthrough: Manage assets using the 'Four Wallet Rule', set multi-layer stop losses, and develop trading plans combining technical analysis and on-chain data.
Execution Breakthrough: Strengthen discipline through trading diaries and stress tests to avoid emotional decision-making.
Remember, the market is never short of opportunities, but survival is more important than quick profits. When you can calmly dollar-cost average in a bear market, rationally reduce positions in a bull market, and maintain discipline in oscillations, you have quietly joined that 20%. True victory is not about defeating the market, but surpassing your past self.
If you currently feel helpless and confused in trading, and want to learn more about the crypto space and first-hand cutting-edge information, click on my profile to follow me, and never get lost again!@加密大师兄888 Understanding the market clearly gives you the confidence to operate. Stably making profits is much more practical than fantasizing about getting rich.